Ohioans have choice of local phone service
By CYNTHIA VINARSKY
VINDICATOR BUSINESS WRITER
YOUNGSTOWN -- Decisions, decisions.
First, the push to choose a new natural gas supplier. Then, an advertising blitz urging homeowners to consider picking a new electricity supplier.
Next up for Ohio consumers? The right to choose a new local telephone service provider.
Long-distance companies are gearing up to add local service so they can compete with SBC Ameritech, the lead provider of local phone service in Ohio with 4.2 million access lines and about $2 billion in local service revenue.
So far, the Public Utilities Commission of Ohio says six companies are offering bundled phone plans in the Mahoning Valley combining long distance and local service, along with a menu of other features such as Call Waiting, voice mail and conference calling.
Savvy consumers may be able to save money by switching from Ameritech, said Shana Gerber, a PUCO spokeswoman, but only if they do their homework. Otherwise they may find themselves paying more for options and services they don't want or need.
There's one major difference between choosing local phone service and picking new gas and electric providers, she said.
With gas and electricity, the consumer was automatically switched back to the original supplier if the company he chose went bankrupt, was unable to meet its supply demands or otherwise failed to perform.
With local phone service suppliers, that won't apply. If the chosen provider fails, she said, the consumer will have to find and sign up with a new company themselves.
If they decide to switch, the PUCO warns consumers not to cancel their current phone service until the new service is in place because most companies will not pick up a customer who is not being served by a provider.
The push for choice in local phone service in Ohio started about a year ago when Ameritech told federal regulators that it wants to branch into the lucrative long-distance market.
To do that, under terms of the Telecommunications Act of 1996, Ameritech must open its main business to competition.
At first, competing businesses were slow to react to the new opportunity, Gerber said. Some began offering long distance-local service packages to businesses, but there was little movement in the residential market.
The PUCO got things moving by reducing a one-time, nonrecurring fee Ameritech charges competing companies and approving a temporary cut of its monthly line leasing fee. Without those reductions, competing companies were looking at a very slim profit margin, Gerber said.
Commissioners dropped the one-time fee from $111 per residential customer to 74 cents per customer, she said, and reduced the monthly line leasing fee from $13 per month to about $11 per month for two years.
MCI was the first to enter the residential local service competition in Ohio, offering a plan it calls The Neighborhood, which is already available in 31 other states.
The nation's second-largest long-distance company and a division of financially troubled WorldCom Inc., MCI's Neighborhood offers unlimited long distance, unlimited local toll calls and unlimited local calls, plus several options, for $49.99 a month.
A second, lower-priced MCI option offers unlimited long distance only to other MCI Neighborhood customers, plus reduced rates for other long-distance calling.
First Energy, already a major player in the electric and natural gas markets, is the newest competitor in the field.
The utility giant is the major shareholder in Akron-based First Communications, a long-distance company that's now offering a choice of three plans combining local service, fixed amounts of free long-distance service and options such as Call Waiting and three-way calling.
First Communication is promoting its service to First Energy gas and electric customers through mail offers. Spokeswoman Heather Faeth said its plans can save consumers as much as 40 percent compared to Ameritech, and its customer service calls are answered "by a live person, in 30 seconds," not a voice mail system.
AT & amp;T, the nation's largest long-distance company, is offering three plans for local service, but consumers also must pay for one of three long-distance service options.
The lesser-known Talk America offers three one-price plans. Customers who sign up their far-away friends and family get unlimited free interstate long distance to other Talk America Local Bundle customers, but other long-distance calls are billed at a reduced per-minute rate.
Communication Options offers three bundled long distance-local plans which all include the same package of features like Caller ID, three-way calling, Call Waiting and call forwarding. The company also boasts that customer calls are answered by a person during regular business hours, not a voice mail system.
Core Comm offers five plan options, with unlimited Internet use included in three of them. The company offers reduced long-distance rates for minutes not included in the plans.
The "burden of proof" is on Ameritech to prove that local service competition is thriving, said PUCO spokeswoman Gerber. An independent auditor is monitoring the local telephone service business in five states where Ameritech is dominant, including Ohio, and results of that audit are expected to be released in November.
PUCO commissioners will review the results of the audit and issue an opinion on whether competition is sufficient to warrant allowing Ameritech to start offering long-distance service. Their recommendation will be forwarded to the Federal Communications Commission, which will make the final decision.
Competition Ohio, a coalition of consumers, businesses and groups promoting telecommunication competition, wants to see competitors holding 15 percent to 25 percent of the market share for local service before PUCO allows Ameritech to offer long distance.
The group released an FCC study last month indicating that Ameritech and other large local service providers controlled more than 95 percent of all lines in Ohio. Competition Ohio said the data, based on reports filed by the phone companies in December, showed competitors had 1.3 percent of residential and small business lines, up from 0.7 percent six months before.